Internet of Things

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The Internet of Things (IoT) is the interconnection via Internet of computing devices embedded in everyday objects, enabling them to send and receive data. It is a system of interrelated computing devices, mechanical and digital machines, objects, or people that are provided with unique identifiers and the ability to transfer data over a network without requiring human-to-human or human-to-machine interaction.


How It Works

A complete IoT system integrates the following four (4) components: sensors and devices, connectivity, data processing, and a user interface. Each component will be described in-depth in the sections below.

"How it Works" IoT described by IBM

Sensors and Devices

The sensors and devices first begin by collecting data from their environment. Sensors are typically utilized because they can be bundled together or sensors can be part of a device that achieves more than simply “sensing.” For example, your phone is a device with multiple sensors, such as your camera, GPS, fingerprint, accelerometer, etc.), however, your phone is not just a sensor.


Once the data has been collected, it gets sent to the cloud. Generally, something that happens “in the cloud” is an activity that takes place over Internet connection instead of on the device itself. Furthermore, the data needs a means to get to the cloud. For example, the sensors and devices can be connected to the cloud through a variety of methods, such as cellular, satellite, wifi, bluetooth, low power wide area networks (LPWAN), or connecting directly to the Internet via Ethernet.

Data Processing

Once the data arrives to the cloud, the software must perform processing on it. The processing could be simple, such as checking that the temperature on the thermometer is within an acceptable range, or it could be complex, such as utilizing computer vision to identify people or objects in your home.

User Interface

Once the data is collected and processed, the information must be made useful for the end-user. This could be accomplished via an alert to the user, such as an email, text, notification, etc. For example, the user receives a text message when the temperature is too high in their home.

In addition, a user might have an interface that allows them to proactively check on the system. For instance, a user might check the videos feeds of their house through a phone app.

Furthermore, depending on the IoT application, the user may also have the ability to perform an action to affect the system, such as the user remotely adjusting the temperature via a mobile app. Moreover, some actions are performed automatically, meaning instead of waiting for you to adjust the temperature, the system could do it automatically through the predefined rules.

In simple terms, an IoT system consists of sensors and devices that communicate with the cloud through a type of connectivity. Once the data gets to the cloud, software processes it and then could possibly decide to perform an action. A user interface allows them to complete any desired changes. Furthermore, any adjustments or actions that the user makes are sent in the opposite direction through the system (i.e., from the user interface, to the cloud, and back to the sensors and devices) to complete the change.

Leading IoT Devices

Some of the most commonly adopted IoT devices today are smart home devices (i.e., learning thermostats, surveillance systems, and universal remotes), wearables (i.e., FitBit and Apple Watch), and smart city devices (i.e., traffic cameras). The most widely adopted smart thermostat in Canada is the Nest Smart Home Wi-Fi Learning Thermostat, which sells for $382.72CAD

Gartner identified these top 10 IoT technologies for 2017/2018:
1. IoT Security
2. IoT Analytics
3. IoT Device Management
4. Low-Power, Short-Range IoT Networks
5. Low-Power, Wide-Area Networks
6. IoT Processors
7. IoT Operating Systems
8. Event Stream Processing
9. IoT Platforms
10. IoT Standards & Ecosystems

Smart Homes

The term “smart home” refers to a home equipped with devices such as lighting and heating controls that the user can control remotely through an internet connection. Smart devices are intended to provide at home convenience for its consumer.


Thermostats are programmed to learn what temperatures its user prefers at certain times and then automatically adjusts the temperature without direction. This device creates more comfort for the user at home and saves energy and money. Nest advertises that it saves its customers an average of $168-$186CAD per year; therefore, paying for itself in under two years.

Surveillance Systems

Smart surveillance systems scan and analyze a given area, recognizing humans apart from animals or other objects. These surveillance systems will then alert the user via text message or notification and the user can live-stream the surveillance footage and even send a voice recording to play aloud in the area.

Chemical/Gas Detectors

These detectors are used to measure the levels of various gases and chemicals in the air. For example, one of the more common devices is the Nest Protect Smoke Plus Carbon Monoxide device ($180CAD).

Smart Refrigerators

Although it may sound like an overly-futuristic device, smart refrigerators are already available and used by many consumers. An example is the Samsung Family Hub Refrigerator (~$4198CAD). This refrigerator has three built-in cameras that the consumer can access through their mobile phone via an internet connection. As well, the large-Wi-Fi enabled touchscreen on the front of the fridge can be used to display notes, photos, and even play music.

Smart Homes in Entertainment

I.T. Official Trailer 1 (2016) - Pierce Brosnan Movie

The idea of IoT and an interconnected world is not a new notion. One of the oldest movies about home automation is Electric Dreams, where a computer controls lighting and security features in the home. The more recent film, I.T. (2016), turns the leisure of an automated home into a thriller movie when the systems are hacked.

These theme of losing all privacy from technology taking over our homes or “sanctuaries” is not far off from George Orwell’s “1984.” In Orwell’s book the quote, “By sitting in the alcove, and keeping well back, Winston was able to remain outside the range of the telescreen, so far as sight went. He could be heard, of course, but so long as he stayed in his present position he could not be seen". This sounds eerie and uncomfortable for most people, but it’s already a reality for those with smart devices. Although the government is not tracking your every move (or so we like to think), this data is still recorded, and there is the small chance that your devices could be hacked and rob you of your privacy.

Smart Stores

"A RFID Journal Video" described by Lululemon

Similar to Smart Homes, smart stores contain devices that connect via an internet connection and help to improve the accuracy of customer experience, inventory, sales, and product reports. These interconnected devices allow stores to better serve their customer base by delivering real-time information including the location of products. Other IoT devices that stores use include infrared foot-traffic counters and cellular or Wi-Fi tracking systems. These systems allow stores to gain insight on where their customers are dwelling and can then direct employees to that area. The implications of cellular tracking enable stores to send personalized coupons and advertisements to customers based on what area of the store they are in or on what items they buy most frequently. Should we discuss the downsides to converting to a smart store (i.e. costs, learning curve)

Radio Frequency Inventory Devices (RFID)

RFID tracking is similar to using barcodes in the sense that a reading device scans the tag or sticker then retracts digital data specific to that item. Radio waves capture the data and send it to the store's database. One of the main differences between the two is that RFID tags can be read without being directly in front of the reader device.

Leading fitness apparel brand, Lululemon Athletica (Lululemon), views inventory accuracy as foundation to their primary goal, delivering the optimum guest experience. By implementing an RFID solution, they can provide real-time, accurate inventory visibility and provide the ability to locate products for all their guests easily. Lululemon also recognizes that RFID helps to streamline store operational processes.

IoT Disadvantages

Like any other new technology, there is always the disadvantages next to its intriguing advantages. The following sections will highlight IoT’s disadvantages of compatibility, complexity, as well as privacy, security, and safety.


Currently, there is no single standard for the devices and service providers used. Therefore, questions are raised over the compatibility of the information obtained from various devices and their integration for completing a certain assigned task.


The IoT system itself is complex, leading to several opportunities for failure. For example, a husband and wife may both receive messages that they need more milk, so both of them end up buying more, leaving them with double the quantity required.

Privacy, Security, and Safety

The growth of IoT carries several benefits, as it will change people’s lives and potentially transform the world. However, this new technology has several privacy, security, and safety issues, since the increase in connected devices gives hackers and cyber criminals more entry points.

There is too much data: the sheer amount of data that IoT devices can generate is staggering, which creates more entry points for hackers and leaves sensitive information vulnerable.

Unwanted public profile: users often agree to terms and conditions without actually reading them. Some of these terms and conditions may state that the company could use collected data that consumers willing offer to make employment decisions. Through the data collected, a profile is created without the user realizing, potentially causing future damage.

Eavesdropping: manufacturers could actually use a connected device to person’s home. Therefore, all conversations could be recorded by your IoT devices, leading to the fact that companies will be aware of all your conversations and habits, including confidential information.

Consumer confidence: each of these problems could put a dent in consumers’ desire to purchase connected products, which would prevent IoT from fulfilling its true potential.

Empowering Consumers Through the Collection of Data

IoT devices are continuously and constantly collecting data. After being captured, data can be stored, analyzed, combined with other data, sold, or shared.

Whether consent has been granted or there is an awareness or not, individual consumers are subject to having more and more information collected from them. This includes data about behavioural patterns, personal preferences, location frequencies and more. This data is collected over time and often from various devices, then aggregated and analyzed to better understand the consumer. This deeper comprehension about each individual consumer allows organizations to tailor the offered services, products, content, or messaging to meet the specific needs of each consumer.

Although organizations yield many advantages of increased means of data collection, consumers also reap benefits. For example, with more data available via IoT devices it is easier for consumers to make more efficient and informed decision, save time during everyday tasks, and more. The benefits of data collection to the consumer in specific areas of consumption are outlined below:

Data Collection and Consumer Health

Smart Body Analyzer

A Smart body analyzer is a step-on scale that empowers consumers by providing them precise measurements of body statistics including BMI, weight, heart rate, body fat mass composition. The smart body analyzer then automatically syncs these statistics to the consumers profile in an app on their smartphone.

With data being constantly uploaded to the app, users have a comprehensive history of their body statistics that can be accessed anytime, anywhere. This allows for easy tracking of overall health, the ability to compare statistics between time periods, an indicator of concerning or unhealthy measurements, and more.

Smart Cups

Smart cups collect data about individual users in order to help them reach hydration goals. These devices have the ability to monitor and track a user's hydration status, calculate liquid intake, and notify users when they don’t meet the recommended daily intake. These devices automatically sync with smartphones. Certain smart cup models can even identify the calorie, sugar, caffeine, and fat content of the beverage poured into the cup. This data allows consumers to be more informed about the nutrition content of their beverages, and more accurately track nutrition intake.

Smart Toothbrushes

Smart toothbrushes monitor and track brushing habits. This interactive device syncs with smartphones, uploading data including time spent brushing, the pressure applied when brushing, and areas of the mouth that were neglected to an app. Many smart toothbrushes on the market also send real-time notifications if users are brushing too hard, or have brushed long enough. The data collected from the smart toothbrush helps users improve their dental hygiene.

Data Collection and Smart Homes

Smart Fridge

Smart fridges empower consumers by simply providing them more information about the contents of their fridge, accessible at anytime and anywhere from a connected smart device. The capabilities of smart fridges include being able to view the inside from a users phone by turning on in-fridge cameras. Many models also have touchscreens, used to record a grocery list that syncs to a user's app, so that the list can be viewed remotely.

These capabilities decrease inconvenience experienced during shopping, by eliminating time-consuming calls or texts to family members at home asking what is needed to buy.

Smart Washing Machines

Smart washing machines allow users to monitor their washing machine from an app on a connected smart device. Users save time by being able to remotely check the progress of the current load, start the machine, switch the size or water temperature of the load, and receive notifications when a load is complete.

Smart washing machines also self-monitor to identify maintenance problems, sending real-time notifications to the app (or if programmed, so the users email or cellphone via text) so the user is aware.

IoT and Advertising

Optimal advertising is getting the exposing the right consumer to the right brand at the right time – and IoT’s predictive ability helps achieve this.

When consumers use IoT devices the data collected becomes available for that users personal use, for example on an app on their smartphone. However, that data is also sent to the company. Companies selling IoT devices are creating user profiles and continuously building the profiles up as more and more usage of the device takes place.

Companies are using this data to anticipate individual consumer’s future behaviour. This gives them the ability to advertise content personalized to the consumer’s specific needs – or sell that data to other companies so they can target the consumer with tailored content. This is a major advantage to companies because it helps them market their brand to the target audience most likely to purchase their products or services.

Smart Bottles

Companies are transforming stagnant alcohol bottles into connected bottles with near field communication sensor tags embedded in the labels. The near field communication sensor tag wirelessly connects to nearby smartphones to deliver personalized content.

The sensors identify where the bottle is in it’s transportation cycle (for example, at the warehouse or at a retail store) and the state of the bottle (sealed or open). This information is combined and used to send real-time, targeted content to the consumers smart phone including promotional offers if the location detected is a retail store, or drink recipes once it was detected that the bottle had left the retail area and the seal is opened.

Activity Trackers

Activity trackers, such as FitBit, track user health stats such exercise, food intake, and weight. The company can select, combine, and analyze parts of this data in order to derive insights about the user and anticipate future behaviour.

For example, it can determine if you are trying to lose weight. Then, the company will share this information, and perhaps information such as the user’s registered address or phone number, with partner companies selling weight-loss supplements. The weight-loss supplement company can now target this consumer with a coupon code through text message, or direct them to the nearest retail location selling it’s product based on the location data provided.

The Future of Businesses Using IoT: Analytical Tools

With the sheer amount of analytics being collected from endless touch-points – whether it is a smart phone, connected household appliance, or surveillance camera – IoT technology is bringing in volumes of data larger than ever before.

However, collecting data is not enough. The result of this is is an emerging market for developing tools to analyze and transform the data into meaningful information that can be understood by others and used for decision making.

SAP and Meteo Protect

An example of a company adopting innovative technology to better analyze data is Meteo Protect, an insurance broker that provides customized weather-based coverage to businesses. Meteo Protect has employed SAP HANA, an in-memory database that performs advanced analytics such as spatial data processing, predictive analytics, text search, amongst more. SAP HANA enables Meteo Protect to capture and store data from various devices using cloud technology.

Meteo Protect now provides customers real-time insurance quotes, by aggregating and performing algorithms on collected data, from their customer app (i.e. specific customer needs, business size), from the cloud (i.e. global weather parameters, historical climate data) and from the company database (i.e. specific customer profile).

Ethical and Social Implications of IoT

IoT creates disruptions in our societal ecosystem – both positive and negative. In order to mitigate the amount of harmful and inappropriate actions taken through IoT devices, IoT ethical and social governance must be developed.

The "World Governance Index" (WGI) Framework for IoT Governance

First, a policy for IoT safety, security and privacy, requiring the development of viable approaches promoting individual rights, data security, and trust, as well as disincentives and penalties for inappropriate behaviour, corruption, and crime.

Second, a legal framework for determining appropriate behaviour of autonomous IoT entities, responsible and accountable parties for that behaviour, and determination of who can enforce compliance, how, and on what grounds.

Third, focus on human rights and ethical behaviour in the IoT, including a sense of how these would be enforced. This gets to the heart of the need for the IoT to promote human well-being and contribute to the advancement of society.

Fourth, sustainable development of the IoT as part of a larger societal and technological ecosystem, including its impact on biological systems (for example, 3D-printed organs, implants), environmental systems, and natural resources).


Simrin Purhar Natasha Noujaime Rachelle Astley
Beedie School of Business
Simon Fraser University
Burnaby, BC, Canada
Beedie School of Business
Simon Fraser University
Burnaby, BC, Canada
Beedie School of Business
Simon Fraser University
Burnaby, BC, Canada

References on December 3, 2017 on December 3, 2017 on December 3, 2017 on October 1, 2017 on September 29, 2017 on December 1, 2017 on November 23, 2017 on November 29, 2017 on December 2, 2017

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